Understanding the Basics of Auto Collision Insurance

By Ricky LawrencePublished: Monday, November 30th, 2009

Auto collision insurance is not necessarily required by law. However, every car owner should take it as his responsibility to get one. Simply put, this policy covers all expenses needed for any repairs if your vehicle figures in an accident, and you were found at fault. If damaged beyond repair, it could be replaced without you having to spend a cent. This insurance policy is very helpful especially if what you are driving is only on lease or is not yet fully paid.

Motorists should always bear in mind that cars are put to a certain amount of risk whenever it traverses roads. No matter how meticulous you are in taking care of it, your surroundings will not be as meticulous. Accidents can happen anytime just when you least expect it. What you want to avoid is to pay for repair services for something you do not fully own yet. Worst, imagine replacing a damaged car using your own money. In the first place, you got a car loan because you could not afford to pay for it in lump sum.

While it is true that auto collision insurance benefits people who are still working on their deferred payment schemes, it is also advisable for those with cars that were fully paid already. This is because insurance could serve as protection especially if the owner is a frequent traveler. The more you travel, the more chances of getting into an accident. It is better to have this insurance as your safety net rather than getting into financial trouble in the future.

Auto collision insurance is quite tricky that it needs to be further explained. “Collision” should be understood to mean physical contact between two vehicles. Some policies will also cover for cars crashing on to road obstacles like trees or lamp posts. Make sure you are clear of these before agreeing to sign.

The next thing to worry about is when you will be held liable for an accident. Rest assured that auto collision insurance includes liability insurance also because this is very basic and required by law. If you are the innocent party, there is not much of a problem because the other party will shoulder all the necessary costs for repair. However, what happens if you are the guilty party? This is when collision insurance will come into play. If you were wise to get one, the insurance company will give you financial assistance all the way. Indeed, this is a very wise investment that will give you peace of mind whenever you drive.